/ 2 June 2011

Bad month of May for new vehicle sales

New vehicle sales took a knock in May, the National Association of Automobile Manufacturers of South Africa (Naamsa) said on Thursday.

“… [T]he year-on-year growth in total industry new vehicle sales during the month had declined substantially compared with earlier months,” Naamsa said in a statement.

Sales were down for industry new light commercial vehicles, bakkies and minibuses, the medium truck segment and new buses, and exports of South African produced motor vehicles.

A shortage of components from Japan, after an earthquake and tsunami crippled production, added to the slowdown in growth.

“During May 2011 constraints on the availability of components from Japan impacted on the production of certain product lines in South Africa and, together with shortages of various models sourced from Japan, this would have contributed to the slow down in the rate of growth in the new car and light commercial vehicle sales cycle for the month,” Naamsa said.

“These factors would also have contributed to lower aggregate industry exports.”

This problem should be remedied in the medium term.

Subdued sales
Overall, aggregate industry domestic sales improved by 6% to 41,555 vehicles compared to May last year.

Total domestic sales for the first five months of 2011 were 16% ahead of the corresponding five months in 2010.

Export sales for May were “subdued”, down 8% compared to the same month last year.

In May, 83% of new vehicles went to dealers, 10% went to the car rental industry, 5% to industry corporate fleet sales and 2% to the government.

New car sales did “relatively well” in May 2011, improving by 12% to 28 830 units sold compared to May 2010.

“The higher sales of new cars over the past 17 months reflected continued recovery on the consumption side of the economy, largely driven by the 6.5% decline in interest rates since end 2008 and which had contributed to an improvement in the financial position of consumers and businesses through reduced debt servicing costs on the part of households and companies,” Naamsa said.

Sales of industry new light commercial vehicles, bakkies and minibuses were down 8% compared to May last year.

Increase in overall sales
Medium commercial vehicles were down 5%, while the heavy truck segment was up 19%.

The sale of buses, however, was significantly down compared to last year, due to the effect of the World Cup.

“New bus sales had however, as expected, been particularly weak and reflected a fall of just under 57% compared to May last year when bus sales had been boosted in the run up to World Cup soccer event.”

Exports of South African-produced motor vehicles were down 9%, but this was expected to improve.

“Indications of higher growth in the global economy as well as for the South African economy in 2011 should lend support to domestic and export sales of new motor vehicles.”

Naamsa said the industry was still on target to show overall growth in domestic sales of about 15% for 2011.

Export sales were projected to increase by over 25% year on year. — Sapa